CapitaLand's portfolio value hits $10.9b

It is poised to benefit from the growth of Frankfurt’s banking district and overall office market after its acquisition of 94.9% of Galileo.

The transaction did not just extend CCT’s footprint to Frankfurt’s prime CBD. It also bolstered CCT’s portfolio worth to $10.9b, occupancy by 30 bps to 97.6%, and WALE to 6.1 years, UOB Kay Hian said. Maximum contribution by any single property dipped from 24% to 23%, implying asset diversification.

UOBKH analyst Peihao Loke also noted that Frankfurt is an attractive office market with strong take-up, limited future office supply, and resilient rents, all good signs for CCT.

“Frankfurt and its banking district (where the property is located) registered significant increases in take-up in 2017 (the highest level since 2000), resulting in record low vacancies - 9.5% and 6.3% for Frankfurt and its banking district,” the analyst said. “The future supply pipeline until 2019 is also relatively low with good pre-letting (more than 45% of the banking district’s new supply are committed), further decreasing available space expected.”

Frankfurt rents are also amongst the highest in Germany compared with other major German cities in the last 10 years and are usually stable and resilient, Loke added.

Meanwhile, UOBKH expects more overseas expansion from CCT will come. The company has been looking to allocate 10-20% of its deposited property overseas, which will only reach 4.6% post-acquisition of Galileo.